Budgets/Spending/Market Size

No big surprise that apparel continues to be the most popular retail category across all channels, but what is noteworthy is that clothing purchases show no sign of slowing, particularly online.   A survey by Onestop Internet revealed that the apparel category is driving online growth, with 45% of respondents saying they plan to buy more clothing online than any other retail category in the next 12 months.  

Construction spending in the retail sector saw a dip in June, according to a report by the Associated General Contractors of America, but the first half of the year recorded an overall gain.   Commercial (which includes retail, warehouse and farm) construction declined 1.6% in June, per the report, but climbed 8.6% year-to-date. Association officials said spending appears to have leveled off after a strong early start to the year prompted by mild winter weather conditions in many parts of the country.  

Temperatures for the U.S. will trend the warmest in at least five years.    August begins with an active pattern along the East Coast with showers and thunderstorms. Heat will be building across the Central U.S. with a heat wave likely developing in the first week of August. The heat spreads to the East Coast later in the week. Another heat wave during the second retail week of the month will keep it feeling firmly like summer.   

Deal volume in the retail and consumer sector is up, but deal value is down.   Deal volume in the second quarter in the sector reached its highest level in the past 12 months, with 282 announced deals, up 5% over the first quarter, according PwC’s Q2 2016 retail and consumer M&A report.  

Consumers are putting their best foot forward when it comes to spending.

Consumers’ increased confidence in their own financial situation bodes well for back-to-school spending.    At least that’s according to Synchrony Financial’s Back-to-School survey, which found that clothing, shoes and electronics represent the majority of back-to-school spending for most families surveyed and more than a third expect to spend more in both categories this year. Longer supply lists and more technology needs are among the drivers of increased spending.   

Retailers should be cheered by the latest forecast from the National Retail Federation.    With increases in consumer spending expected to remain solid during the remainder of the year, the NRF on Tuesday upped its forecast for retail sales in 2016 to 3.4%, from the 3.1% forecast earlier.    Online and other non-store sales, which are included in the overall figure, are expected to increase 7% to 10% year-over-year rather than the 6% to 9% forecast earlier.  

With back-to-school spending on a “stock up” cycle rather than a “make do” cycle, total spending for K-12 and college school supplies is expected to reach $75.8 billion, up from last year’s $68 billion, according to the National Retail Federation’s annual survey conducted by Prosper Insights and Analytics.   

With home prices on the rise, consumers are once again investing in remodeling and repair projects.